Tags: stocks | correction | volatility | bullish

Joe Fahmy of Zor Capital: Stock Investors Should Put on Their Seat Belts

By    |   Thursday, 27 March 2014 11:59 AM

Stock investors should buckle up because it's about to become a bumpy ride, according to Joe Fahmy, managing director at Zor Capital.

Fahmy predicts a market correction lies ahead in 2014, but he told Yahoo Breakout it is unclear if the downturn will be sudden or gradual.

“The market can do one of two things,” said Fahmy. “It can correct through price or correct through time.”

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Fahmy said his research showed volatility often follows years of big stock market gains.

“I’m bullish longer term. I just think this year is going to be challenging for traders because 2013 was almost too smooth, too easy on the way up.”

Fahmy predicted there could be a 10 percent correction this summer, based on the typical stock market cycle during mid-term election years.

“If there is upside volatility I think it will come in the fourth quarter,” he predicted. “But I think this summer there will be more downside volatility.”

At MarketWatch, contributor L.A. Little, a professional money manager at Technical Analysis Today, said major stock indexes currently are poised at precarious levels from a technical standpoint.

“One can never know for sure that a top is in. It's only in hindsight that one knows. What one can know is when the risks are elevated, and they definitely are now,” Little said. “For so long, it hasn't mattered. Maybe it won't again. That's how markets make highs. They cry wolf so many times that you no longer listen. Then, finally, a wolf really does appear.”

One analyst told Bloomberg News that a bit of investor caution may be warranted at current stock levels.

“People are reducing their risk portfolios a little bit,” said John Fox, director of research at Fenimore Asset Management, which manages about $1.9 billion in assets. “Some of the speculative parts of the market have been selling off. If you own a stock and the reason you own it is it’s going up and it stops going up, there’s no reason to own it.”

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Stock investors should buckle up because it's about to become a bumpy ride, according to Joe Fahmy, managing director at Zor Capital.
stocks,correction,volatility,bullish
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2014-59-27
Thursday, 27 March 2014 11:59 AM
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